The Federal Court of Appeal (FCA) recently upheld the decision of the Trial Judge, holding that one claim of the patent at issue was valid and infringed, and the remainder of the claims of the patent were invalid for a lack of sound prediction. The FCA also upheld the punitive damages award (decision here; our summary here).
The FCA upheld the decision of the Trial Judge in excluding certain prior art and analyzing the expert evidence. Similarly, the FCA upheld the Trial Judge’s construction of the patent. The FCA held that a “judge’s assessment of the expert evidence will not be reversed on appeal absent palpable and overriding error.” (para. 74). The findings of novelty and non-obviousness were upheld.
In considering the allegations regarding lack of utility, the FCA upheld the finding that there was no need to test every minute variant in order to establish utility. For the same reasons, the claim was also not invalidated for overbreadth. The FCA confirmed that the doctrine of sound prediction applies beyond pharmaceutical inventions. The FCA then held that “the factual basis, the line of reasoning and the level of disclosure required by the doctrine of sound prediction are to be assessed as a function of the knowledge that the skilled person would have to base that prediction on” (para 152). The FCA also held that the factual basis and the sound line of reasoning do not necessarily have to be disclosed in the patent, if they would be apparent to the skilled person. However, in this particular case, there was no evidence of demonstration or sound prediction of utility of the backward inclination embodiment. Thus, those claims were upheld as invalid.
Finally, the FCA upheld the punitive damages award. The FCA held that while generally entitlement and quantum of punitive damages should be determined after the quantum of compensatory damages is established, there are circumstances where the just and expedient resolution of the litigation requires a different approach. Furthermore, in this case, the parties had agreed that entitlement would be determined at the trial, separately from the issue of quantum. The FCA also held that patent infringement should not be immunized from punitive damages. Thus the appeal and cross-appeal were both dismissed.